All Forum Posts by: Brandon Turner

Thanks Nick! Glad you are enjoying my blog thus far! It's good to know people are learning something!

I'll add to the thread though and say I love the posts and especially the interviews over at TheBuyAndHoldGuys.com. They get a lot of good info from people really succeeding in real estate.

Jason - I've seen similar results. Very cool stuff!

Hey Dan. I'm glad to see you getting ready to jump in to real estate. Also, I think it's great that you are spending time right now learning via books and blogs. Very smart. You also might want to consider connecting with a seasoned investor in whatever area you end up choosing, and learn the ropes first hand before spending your own money.

As for where to invest, I think there are good and bad area anywhere you choose. Obviously, some might be better than others but as long as you stick by principles (positive cashflow only, estimate conservatively on repair costs, etc) you can do well anywhere you live.

Real estate is a math game, so just get good at the simple math, live where you want, and invest where it makes sense.

Keep us updated!

Hey Manuel,

I started when I was just 20. A few thoughts -

Real Estate is both a career and an investment. Which do you want? You can invest in real estate for a job, to make income to live off of but not invest for long term. Or you can have a regular day job and invest for future wealth. Or you can do both. Doing both is difficult, but rewarding. If you don't love landlording or are nervous - get a regular job and invest for the future. Without a good solid job, its tough to get low-rate financing from banks, thus harder to get cashflow. It's kinda a catch 22.

Secondly, I started with no money. It is possible, but its tough. But 14k is enough to get started. I'd become really good friends with some people on BiggerPockets or your local real estate investment club.

Oh, and besides this post, I wouldn't let just anyone know how much money you have or people will try to take advantage of you to get it. Obviously, it was needed for the purpose of your question, but very cautious. There are a lot of bad people out there.

Good luck!

wow Thanks everyone for the input. I guess it comes down to whether or not I can find someone to do this. I mean, a lot of it would come down to them trusting me.

Jon, your numbers are probably pretty accurate for what I'm thinking. So 11% ROI for them, which is a heck of a lot better than they get from their CD's at the bank. But of course, much higher risk for them. I think the selling point for most people choosing to do this would be one simple thing: Investing in real estate is cool. People know its popular, know it makes money, and would love to drive their friends by the house and say "yeah, I own that". Its cool. So my hope would be in that.

True, I have no skin in the game. And that is a problem for many people, especially experienced investors. But this wouldn't be for people like us, but for the guy who works 40 hours a week for the county, or the teacher, or whatever. It gets them into the game, a chance to be "cool", and they feel like "at least I'm doing something". Because 50% of a deal is better than 0%, which is where most of the world is sitting right now.

Anyways, thoughts?

Hey, I've been working on a strategy to get some more properties under my belt, and wondering what you guys think of it. Am I giving away too much? Not enough? Wasting time?

Basically, my plan is based on three premises:
1.) I don't want to flip with Hard Money (Been there, done that, not real good to sell now)
2.) I want cashflow, at least $100 per unit
3.) I cannot get any more mortgages (Too much property debt, not enough "income", and too many deductions to use my cashflow as income)

So, my idea is not a new one, I'm sure. Basically, I would find (advertise, friends, etc) partners to purchase properties with. I would find the property (single fams, small multifamilies), research loan options, put the deal together, arrange for any repair work (not physically do the labor - been there, done that - too tired), and manage the property from start to finish (3-7 year timeframe, or whenever the market improved). Basically, I would do 100% of the deal. The Partner would do one thing - get a mortgage because they have a down payment and the ability to get the mortgage. Typical sale price would be $50k - $150k, with 25% down.

We would split cashflow down the middle, as well as future profit after the sale. 50/50.

I would also require the partner to come with an extra $3000-$5000 at closing to put into an escrow account for those emergencies (tenants destroy stuff, etc), as a hedge against a ruined partnership the first time something major comes up. It would already be paid for.

Furthermore, would it be appropriate to collect a small ($1000 - $2000) fee, upfront at closing to pay me for the work to do all this? That would get me a bit of income for putting this all together. Is that too tacky to ask for?

Anyways, this ended up being much longer than I hoped, so if you are still reading, thank you! Let me know if you think this is viable, profitable, or whatever. Thanks!

I generally believe good deals can be found anywhere, but obviously there are better and worse areas.

I'm biased of course, but I think my area (Aberdeen, WA - Hometown to Nirvana and continual cloud cover) is one of the best I've seen for multi-family and single family homes in cash flow anyways. Appreciation out here is slower than most areas, but properties are very inexpensive. But even here, there are good neighborhoods, bad neighborhoods, good properties, and bad properties. It helps to either find someone in the area you are going to invest who knows the area well, or invest in an area you know real well.

Good luck! Let us know your thoughts.

Hi,

First, if you do not own your own home, I'd use that money and get an FHA 203K Remodel loan on a home for yourself. 3.5% down payment would enable you to buy a $100,000 property and still pay for closing costs and take your family out to dinner and have a little left for emergencies. Just make sure to research and buy the perfect deal. You should be able to, at minimum, build $50,000 equity fairly easily after repairs are done, combined with the record low interest rates and tax benefits its a no brainer.

If you do already own your own home, you can still do a FHA Remodel loan to buy an investment property, but I believe the required down payment is higher, like 10% or 20%. In that case, if you can find a house for 20-30k that is not a disaster in the "hood", then go for it. But that is going to be a lot harder to find. However, with the low rates that are out there, it would be difficult not to cashflow on properties in that price range.

I don't recommend getting an unsecured personal loan. One, it would be almost impossible, and two - the interest rates would back you into a corner where you "have to sell", and this is not the time to sell.

If you can find another investor to work with, its not a bad idea. Making money in Real Estate is hard work, mainly because of all the little problems you don't expect. Working with a seasoned investor would allow you learn from their past mistakes, and that is invaluable. But - partnerships are hard work too. Another option - stick that money in a bank account for emergencies. Then find a seasoned investor and ask to be his shadow for 6 months. Learn all you can, without risking your money. Then jump into the game.

So to sum up - 1st choice - Buy your own house and hold. 2nd- Buy a low-down cheap rental and hold (or offer it as a "Rent to own" to the renters and maybe sell. 3rd - find a mentor to work with.

Good luck! Keep us posted with what you decide to do.

I'm sure this happens to you often:

A tenant moves out on the first, and their home needs repair. So you spend 5 days fixing it up and getting it "rent ready" again. But now you've missed the biggest rush of potential tenants who want to move in the first of the month.

This happened to me, and I'm wondering what others do in this situation. We found some quality tenants who would like to move in, but not for 3 weeks at the start of next month. Should I take the 3 week loss in rent (getting the deposit to hold, of course), or keep looking for someone else who can move in sooner?

Suggestions? Thoughts?

I recently hired one of my tenants in an apartment to work for me at the apartment complex, doing maintenance work. (He is a close friend - I do not recommend letting tenants work for you).

If he works in exchange for rent, does anyone know if he is classified as an "employee" and thus subject to FICA tax withholding, workers comp, or industrial insurance (L&I in Washington State)? And if he works more than whats required to pay rent, and I pay him hourly, how is that looked at?

I did the calculations and it would cost me almost $500 per month extra to classify him as an employee.

Thanks!